Pharmacy Benefits Glossary
A guide to general pharmacy benefits terminology.
What Is a Generic Equivalent?
A generic equivalent is a medication created as a 1:1 equivalent to an already-marketed brand-name drug. A generic equivalent is considered a bioequivalent to the brand name represented. It must have the same biological effect, represented by the drug’s absorption, distribution, metabolism, and excretion in the body. They are created as more affordable alternatives to name-brand drugs.
When a new drug is developed, patented, and approved, it is protected from competitors copying it for a set period. This allows the drug’s creators to recoup years of research and development costs and marketing costs before they have significant market competition. Once the brand-name period of exclusivity expires, other manufacturers are allowed to develop a generic equivalent that sells for a competitive price as long as it meets all of the FDA’s required criteria
What Is the Difference Between a Generic Equivalent and a Biosimilar?
Both generic equivalents and biosimilars are alternatives to existing brand-name medications. While they serve the same purpose to the marketplace by providing other treatment options to patients, there are key differences:
Generic equivalents must have the same chemically-derived active ingredients as the brand-name version. Their manufacturers must prove they have the same active ingredients, dosage, strength, administration route, and effectiveness.
Biosimilars are derived from living organisms, and while they are highly similar to brand-name biologics, they are not identical. Generic equivalents are treated as completely interchangeable with the brand-name version, whereas biosimilars must prove they provide similar treatment, with no significant difference in safety, potency, or effectiveness compared to the original brand-name biologic.
Even though biosimilars offer cost savings like generic equivalents, they may not offer as significant a savings.
What Does the FDA Require in Order to Approve a Generic Equivalent?
The FDA requires a generic equivalent to have the exact following characteristics as the brand name it represents:
- Active ingredients
- Dosage
- Safety
- Strength
- Purity
- Route of administration
- Quality
- Performance characteristics
- Intended use
While a generic equivalent must closely follow these characteristics for active ingredients, minor differences in inactive ingredients, color, size, and shape variations, and a very small difference in absorption are permitted. If these differences are found to be clinically insignificant, they likely won’t impact approval.
Generic equivalents can only be developed once the brand-name manufacturer’s period of exclusivity has expired. Manufacturers must then follow the FDA’s detailed application and approval process. Once approved, the generic can enter the market. Due to the comparatively shorter development process, generics are typically priced significantly lower than the brand name.
FDA Approval and Standards
The FDA’s process for approving generic equivalents is rigorous in order to see that every element matches the brand-name version. The following are conditions that must be met to receive FDA approval:
1. Submitting an Abbreviated New Drug Application (ANDA)
The manufacturer submits an ANDA to the FDA. The FDA must approve the generic equivalent for the manufacturer to release and market the generic.
2. Proving Bioequivalence
The generic must be shown to provide the same clinical benefit as the brand name in accordance with the rigorous criteria mentioned earlier. Proving bioequivalence must be backed by scientific evidence.
3. Running Stability Tests
The manufacturer must conduct tests that display the product lasts for at least the same duration as the brand-name product.
4. Detailing the Manufacturing Process
The manufacturer must describe in detail the steps they will take in manufacturing to produce the drug, including all safety and quality precautions.
5. Passing Facility Inspections
The FDA will send inspectors to visit the manufacturing facility to verify every process is following to safely produce the medication.
6. Following Labeling Requirements
The manufacturer must produce labeling that is the same as the brand name.
7. Submitting to Ongoing Monitoring
The manufacturer must allow the FDA to continually monitor safety, effectiveness, and quality throughout the supply chain.
Benefits of Using Generic Equivalents:
In most cases, patients who have been prescribed brand-name medications will be safe to switch to a more affordable generic equivalent when released. In rare cases, it may be best for a patient to remain on the brand-name version. A few examples include:
- If a patient’s insurance only covers the brand-name version
- When a patient has an allergy or sensitivity to listed active ingredients in a generic version
- If the patient’s doctor has greater confidence in clinical trials with the brand name and is able to continue getting the prescription approved
Outside of these circumstances, patients can typically enjoy lower prices, easier insurance approval, faster availability, and the same effectiveness from a generic equivalent.
How to Find Generic Equivalent Medicine
Generic equivalents are listed in Approved Drug Products with Therapeutic Equivalence Evaluations, which the healthcare industry calls The Orange Book. Users can search the online version of the Orange Book for generic equivalents. You can also search the First Generic Drug Approvals list for recent approvals.
You can search the Orange Book database for generic equivalents based on brand name equivalents, therapeutic equivalents, active ingredients, and other details.
